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Sinclair Broadcast Group, the biggest US local television station owner, has agreed to acquire rival Tribune Media for about $6.6bn, including debt, in a deal that is expected to be the first of many in the media industry following the Federal Communications Commission’s recent decision to effectively loosen a cap on local television station ownership.

Sinclair’s cash and stock offer of $43.50 per share represents a 26 per cent premium over Tribune’s undisturbed closing price on February 28 and gives the company an equity value of around $3.9bn.

In addition, Sinclair is also assuming about $2.7bn of Tribune’s net debt.

“This is a transformational acquisition for Sinclair that will open up a myriad of opportunities for the company,” said Sinclair chief executive Chris Ripley.

Sinclair won out over other bidders including Rupert Murdoch’s 21st Century Fox, which explored making an offer in concert with private equity firm Blackstone, and Nexstar Broadcasting Group, another big station owner.

Combining its holdings with Tribune will give Sinclair more leverage in negotiations with national broadcast network owners such as Fox, which pay local station owners lucrative fees to carry their channels. Sinclair operates 173 stations in 81 small and medium-sized markets including Baltimore, Maryland, Wichita, Kansas and Salt Lake City, Utah.

Tribune, a station group that used to be part of the company that owned newspapers such as the Los Angeles Times, owns 42 stations, many in major markets including New York, Chicago and Los Angeles. It also owns the cable channel WGN America.

Sinclair said it expects the deal to during the fourth quarter of this year. The transaction will be funded through a combination of cash on hand and debt.

It added that it made sell certain stations in markets where its presence overlaps with Tribune’s in order to meet antitrust requirements.